ABSTRACT: This paper analyzes a recently reconstructed proto-chapter of Rothbard’s Man, Economy, and State (2009 [1962]) tentatively titled “Chapter 5: Producer’s Activity” (Rothbard, 2015 [1953]). In it, Rothbard used many concepts of standard neoclassical microeconomic analysis that he would later criticize, such as perfectly competitive markets and the isolated firm. This paper juxtaposes the proto-chapter with Rothbard’s finished work and argues that after grappling with the problems of Marshallian partial equilibrium production theory, Rothbard substituted it with an Austrian general equilibrium analysis. This distinctive approach did not construct production theory from the vantage point of an isolated price taking firm, but rather viewed the overall economy as a temporal and dynamic production structure with the capitalist-entrepreneur occupying the central role. This Austrian production theory has important consequences for understanding the efficiency of markets, the formation of output and input prices, and the profit-maximizing output level of an isolated firm.